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Unformatted text preview: so on) o Income (the flow of money given to an individual in a given year) o Expenditure (the more money that one spends, the more one should be able to pay taxes) Individual spending can be related to standard of living, and a higher standard of living represents a greater ability to pay taxes In Canada all three approaches of ability-to-pay are used for taxation purposes The progressive approach The more income you earn the more money you have to pay Taxes increases for those who can afford to pay it Less burden on families who earn less income Intended to charge individuals the same amount of taxes in regards to their incomes Prevents the rich form getting richer or the poor from getting poorer Example: Family Jones has two working parents. Mr. Jones earns $20,000 a year and therefore pays 10% income tax. Mrs. Jones earns $50,000 per year and therefore pays 20% income tax....
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This note was uploaded on 02/05/2011 for the course ECON 011 taught by Professor Yezer during the Fall '07 term at GWU.
- Fall '07